Investors with an interest in Medical Info Systems stocks have likely encountered both Nextgen Healthcare (NXGN) and Tabula Rasa Healthcare (TRHC). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Nextgen Healthcare and Tabula Rasa Healthcare are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that NXGN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
NXGN currently has a forward P/E ratio of 17.29, while TRHC has a forward P/E of 230.43. We also note that NXGN has a PEG ratio of 2.16. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TRHC currently has a PEG ratio of 6.40.
Another notable valuation metric for NXGN is its P/B ratio of 2.27. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TRHC has a P/B of 6.41.
These metrics, and several others, help NXGN earn a Value grade of B, while TRHC has been given a Value grade of D.
NXGN sticks out from TRHC in both our Zacks Rank and Style Scores models, so value investors will likely feel that NXGN is the better option right now.
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NEXTGEN HEALTHCARE, INC (NXGN) : Free Stock Analysis Report
Tabula Rasa Healthcare Inc. (TRHC) : Free Stock Analysis Report
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